HC Deb 23 March 1981 vol 1 cc633-6
Mr. John Peyton (Yeovil)

(by private notice) asked the Chancellor of the Exchequer whether he would make a statement on the financial effect of the current Civil Service dispute.

The Chancellor of the Exchequer (Sir Geoffrey Howe)

It is too soon to make a reliable judgment of the financial impact of the dispute, but it is already clear that a substantial proportion of the revenue due has been received.

Mr. Peyton

Does my right hon. and learned Friend agree that those who take part in or connive at such disputes can hardly expect to be shielded from the consequences of their action? Will he be very cautious before he allows Government borrowing to increase, as a result of the dispute, beyond an irreducible minimum? Does he agree that the time has come when the mere holding of a grievance should not entitle those holding it to inflict lasting damage on their country?

Sir Geoffrey Howe

I have a great deal of sympathy with the points made by my right hon. Friend. I shall certainly accept his advice to be profoundly cautious before allowing borrowing to go beyond an irreducible minimum. Substantial monthly fluctuations in the level of Government receipts are quite normal.

I also agree with my right hon. Friend about the position of those involved in such industrial action. I assure him that, as elsewhere, those in the Civil Service who refuse to carry out their normal work or who are on strike are not entitled to payment during those periods. I entirely share his view that it is important for people to break the habit of moving from a grievance, however genuinely felt, to the infliction of damage on the rest of the community and on their fellow citizens.

I share my right hon. Friend's view that, given the offer already available in the Civil Service pay dispute, there is no need for a strike on grounds of pay or conditions of service.

Mr. Russell Kerr (Feltham and Heston)

The offer is derisory.

Sir Geoffrey Howe

The hon. Member must take into account that the money on offer to those in the public service comes from the taxes levied on the rest of the community. Many people have accepted pay settlements far below that now on offer.

Mr. K. J. Woolmer (Batley and Morley)

Does the Chancellor of the Exchequer accept that civil servants are showing great restraint? Does he agree that they could bring a halt to the payment of pensions, supplementary benefits, child benefits and many other important benefits? Will he confirm that the Government are receiving less than half of the general tax revenues that they might otherwise expect to get? Does he not agree that as a result of the unilateral tearing up of long-standing pay agreements in what appears to have been a vindictive campaign against the Civil Service the Government have jeopardised good industrial and management-employee relations?

Sir Geoffrey Howe

Sadly, in a society as complicated as ours, many people have it in their power to bring whole aspects of society into disorder, and worse. Our society can hope to survive only if people refrain from taking such action and, above all, if those who enjoy basically secure jobs and who have been made a not insubstantial offer refrain from taking such action. It could do great damage to their fellow citizens.

The pay arrangements for the Civil Service are about, 25 years old. Only on a few occasions have they operated without some sort of change. That is a matter for regret. However, as we told the House only a few weeks ago, the Government are anxious to move towards the establishment of arrangements for determining the pay of non-industrial civil servants with the object of establishing as soon as practible an ordered and agreed system which takes account of all the relevant factors and which commands the widest possible acceptance. The Government have every desire to achieve that objective, as I am certain have the great majority of those who have been persuaded to take industrial action.

I hope that those taking industrial action will reconsider the position and take account of the offer now available. I also hope that they will be prepared to consider the matter sensibly.

Several Hon. Members


Mr. Speaker

Order. This is an extension of Question Time. I propose to call two hon. Members from each side, including the Front Bench spokesman for the Opposition.

Sir William Clark (Croydon, South)

Does my right hon. and learned Friend agree that civil servants not only enjoy security of employment but good holidays and inflation-proof pensions? Does he agree that the offer of 7 per cent. is well in excess of wage settlements in the private sector? Is it not time that we considered the terms of contract of civil servants? If civil servants are to enjoy all those benefits—which are much better than those found in the private sector—should we not consider whether they have broken their terms of contract and whether they are still entitled to those benefits?

Sir Geoffrey Howe

My hon. Friend has drawn attention to many important aspects of the terms and conditions of the employment of civil servants. It is right that all those factors should be taken into account in any review of those terms. The refusal of civil servants to perform their normal duties justifies—as for anyone: else—the withholding of pay. That is well understood. I hope that those who are still being persuaded to take action will consider, fairly and sensibly, the Government's willingness to look for an agreed and ordered pattern for determining their pay in future. I hope that they will reflect on the security of their employment and on the generosity of the offer, and that they will agree to take a more reasonable view.

Mr. J. Grimond (Orkney and Shetland)

Will the Chancellor of the Exchequer pay tribute to those civil servants who have not gone on strike? Will he state the percentage increase in Civil Service salaries during the past two years? Will he consider the situation of those engaged in the administration of justice to see whether it is consonant with their position and the respect that they expect from the public that they should go on strike over totally unjustified claims?

Sir Geoffrey Howe

Naturally I have some sympathy with the right hon. Gentleman's last point. I am happy to pay tribute to the fact that almost half the civil servants demonstrated their loyalty to the service during last week's one-day strike by working normally. It is right to pay tribute to them. I believe that an even larger proportion would be willing to do so now.

Over the past two years, the average increase in pay in the public service, and in particular in the Civil Service, has been just short of 50 per cent. Over the last 12 months there has been an increase of about 25 per cent. That is about twice as high as the corresponding average in the private sector. If those facts and the job security involved are taken into account it is not unreasonable that this House should unite in inviting those taking part in industrial action to call off their action and to be prepared to discuss future arrangements. The Government are certainly willing to do that.

Mr. Michael Neubert (Romford)

Now that computers have given relatively few people in the public service and elsewhere the capacity to damage the Government's economic strategy and even to reduce the nation's defence capability, may I ask whether any progress has been made with the manifesto proposal to negotiate "no strike" agreements with key workers in essential industries?

Sir Geoffrey Howe

The point made by my hon. Friend illustrates circumstances in which it could be advantageous to introduce such arrangements. The Government are prepared to consider seriously that possibility.

Mr. Alan Williams (Swansea, West)

Is it not a fact that this strike need never have happened and that the costs alluded to by the Chancellor need never have been incurred? Has it not taken the Prime Minister's usual tactic of trying to bully those she believes to be weak unprecedently to unite every Civil Service union behind the strike? Has not the Prime Minister, having during the election pledged her support for the Pay Research Unit, refused to publish its findings, unilaterally abandoned this 25-year-old procedure and imposed an incomes policy not on the private sector or even on all the public sector but only on that part that she thought to be weak? Finally, unlike the bullying of her Cabinet wets, has not our hectoring Prime Minister on this occasion chosen opponents who are not willing continually to be humiliated and belittled in public?

Sir Geoffrey Howe

It is a long time since I had the privilege of answering questions by the right hon. Gentleman from the Opposition Front Bench. Unfortunately, there has been no improvement in his style.

I entirely agree that this strike need never have happened and that the costs incurred as a result need never have been incurred. But I regret that the right hon. Gentleman has chosen to take this occasion, when the nation is being harmed substantially by a strike that he acknowledges is unnecessary, to heap abuse on my right hon. Friend the Prime Minister.

The Opposition know that the existing arrangements for the determination of pay in the public service have frequently been suspended and have operated unsuspended on only a minority of occasions. It is for that reason that we are anxious to join the unions in seeking an agreed and orderly arrangement for the future. Meantime, I hope that we can count on the support of the Opposition for the plea that I make for normal working to be resumed as soon as possible.